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9 Pages

Freeport McMoRan acquires Plains for US$17 billion

Freeport McMoRan acquires Plains for US$17 billion

Report summary

Freeport-McMoRan Copper & Gold Inc. (FCX) is to acquire Plains E&P for a total of US$17.2 billion (including debt). In a separate transaction announced on the same day, FCX acquired McMoRan Exploration in a deal that valued the company at US$3.4 billion. This note concerns only the former transaction.Our base-case valuation of the Plains acquisition is US$13.7 billion (NPV10, discounted to January 2013). Against our modelling, the consideration equates to an Implied Long-Term Oil ...

What's included?

This report includes 1 file(s)

  • Freeport McMoRan acquires Plains for US$17 billion PDF - 1.10 MB 9 Pages, 5 Tables, 3 Figures


The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
    • Onshore US
    • Deepwater Gulf of Mexico
    • McMoRan Exploration
  • Deal analysis
  • Upsides and risks
    • Onshore upsides
    • Deepwater upsides
    • Investment high-grading
    • Operational learning curve
  • Strategic rationale
    • Plains
    • Freeport-McMoRan
      • Geographic diversification
      • Commodity diversification
      • Big is beautiful
  • Oil & gas pricing and assumptions

In this report there are 8 tables or charts, including:

  • Executive summary
  • Transaction details
    • PXP acquisition details
  • Upstream assets
    • Plains reported historic and Wood Mackenzie forecast total production, including upside potential
    • Upstream assets: Table 1
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
  • Upsides and risks
  • Strategic rationale
    • WoodMac forecast of Plains net debt cash position and free cash flow outlook sensitivities
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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